Analytics technology continues to mature; however, many companies are lagging behind, especially with embedded analytics, commerce ecosystems and community platform analytics. It’s becoming clear that leaders are looking at analytics much more broadly than IoT and unstructured data. Network operations and ecosystem analytics are emerging that may prove to be the real disruptors.
Competition in digital markets isn’t against companies; rather, it’s competing against time. Connecting with channel-wide data is the foundation for smart digital supply network management. Perhaps Amazon’s most effective competitive lever is its custom-developed operating platform. In the beginning, founder Jeff Bezos envisioned a “flywheel of growth” at dinner with recently hired former Walmart executives that shared Sam Walton’s “productivity loop.” Bezos added capabilities for a lower-cost structure and exceptional customer experience that were difficult to achieve in the traditional retail market — or any market for that matter.
Recognizing that no vendor had developed a system to implement this vision, Amazon designed its own enterprise platform void of traditional constraints. Bezos never envisioned Amazon as a “retailer” per se. Rather he envisioned a system that would attract sellers as well as consumers that would subsidize e-commerce fulfillment cost as well as form the operating platform for omnichannel marketing and fulfillment, proving in line, real-time analytics and optimization.
The analytics enable Amazon to not only compete against time but to convert competitors to partners, increasing selection, new market segments, lower pricing, and offer infinite options to consumers leveraging sellers, service providers, suppliers, and the commerce ecosystem, including services. The Amazon commerce platform is its true source of competitive leverage.
Emerging somewhat “under the radar” over the past 20 years or so, are communities of commerce evolving from the turn of the century “marketplaces” or more recently “control towers” that support strategic sourcing strategies. Emerging from those marketplaces today are companies such as Ariba (SAP), E2open, GT Nexus (INFOR), OneNetwork, JDA, Kinaxis, Amber Road, and others.
What many companies are missing is that these “control towers” are actually commerce community operating platforms that are increasingly adding supply chain management functionality and analytics that leverage and federate data across the community that is more closely resembling the Amazon network platform. Unlike traditional “enterprise” supply chain analytics, platform analytics consider the community ecosystem holistically and consider data, transactions, movement, workflows, and material flow paths from all of the participants in the ecosystem.
Using advanced cognitive analytics based on AI and machine learning, the control towers are evolving to orchestrate and optimize all logistical components comprising a market ecosystem and offering a level of step change productivity, efficiency, asset utilization, and cost reduction well beyond any one participating company can achieve. Supply network operating platforms may well not only be the major disruptor in supply chain management but the lifeboat for companies lagging in analytic maturity.
In 2019, “control tower” platforms emerge from under the radar and companies begin considering these supply network operating platforms for analytics-based competitive leverage. Amazon will continue to expand its base of sellers by offering lower costs of entry to SMB companies that want to play in a market where size doesn’t matter. Nevertheless the Japanese saying, “Know when to cooperate and know when to compete,” may be the connected commerce mantra.
Rich Sherman is a senior fellow at Tata Consultancy Services’ Supply Chain Center of Excellence.
Timely, incisive articles delivered directly to your inbox.